Things you should know about opening your own startup

A decision about opening a new company should be well thought, that is quite obvious for us. But is it also obvious that we really need to learn from our mistakes if we want to achieve success? The fact is that we learn best from our own failures. However, making mistakes is not everything, the key is to be able to notice, fix and then avoid them in the future.

Building a successful company is a complex process which is based on our previous experiences. Therefore, doing something wrong is not a problem, the problem is if you keep doing the same mistakes and you are not making use of your “lessons”. In the article below, you can find some advice that you may find useful when you think about opening a startup.

  1. Learn before you earn – you must be realistic about your skills, experience and knowledge.
  2. You will need to cooperate with lawyers if you want to avoid costly mistakes.
  3. Prepare a good financial model – it is a great way to organize your idea and anticipate potential scenarios. You need to plan ahead if you do not want to find yourself in big chaos.
  4. Put a lot of effort to find good investors.
  5. Realize what your weak sides are and look for such people to work with who would be able to fill these gaps.
  6. Listen to customers, partners, suppliers and employees. Not to the hype and… your skeptical family and friends foreseeing the worst scenarios.
  7. If you want to sell something, first ask yourself:
    – Why would someone buy something like this?,
    – Why would he buy this from me?,
    – Why would he buy this now?
  8. You need experience. No matter how much time you devote for reading books, articles etc. about entrepreneurship, you will not be successful without your own real experience.
  9. Be prepared for bad moments. It is normal that companies sometimes must go through darker periods. Do not give up, learn from each experience and avoid harmful comparisons.
  10. Your decisions can be wrong, but you must make them if you want to make steps forward. Not making any decisions because you are not sure, have not enough information or you are afraid, does not help you develop. You just need to know how to correct the wrong direction.
  11. Be aware that you can lose. If you lose, analyze the whole situation and draw conclusions.
  12. Take care of your best workers. If you do not want your company’s backbone to fall apart, you must take a good care of it. Without your most precious employees you may find your company in a big trouble.
  13. Take care of your health. Working late, a diet based mainly on fast food, travelling too much, too less physical movement and too much stress will bring results sooner or later. We still tend to ignore the influence of such a lifestyle on our future.

Try to learn from the other’s mistakes as much as it is possible. You will definitely make your own too, but it is always better to avoid at least some of them.

A startup – what is it?

When asked this question, one would probably associate the term with a young high tech venture. But is it correct? We have recently started using the word “startup” quite often and maybe just too often. Are all young companies really startups?

Let us start with a definition of a startup to bring some theoretical point of view. Merriam-webster.com explains it as: 1. the act or an instance of setting in operation or motion, 2. a fledgling business enterprise. The deal could be done though, it turns out that it still may cause some problems to determine whether an entity is a startup or not, since there are no certain and constant rules which could help define a startup. Why? Because the profits, revenues, numbers of employees vary between many types of companies.

How about factors indicating graduation from the “startup position”? Some may argue that being a startup even after 5 years since foundation is possible. However, 3 years old startup seem to be “mature” enough to claim that it has transformed into a fully developed company. Other circumstances, such as entering other large company, opening more new offices (startups usually gather around one man office), employing more than 80 people and having more than 5 members of the board, founders starting to sell shares personally, and finally, revenues exceeding $20 million – may direct us to the change in the status of a startup to a “startup graduate”. It might mean that simply becoming highly profitable means leaving a startup position and “maturing”, but as it often happens, some do not really want to mature too quickly.

One thing is crucial in understanding the notion of a startup: not all small businesses, like opening a tiny local shop or a franchise, are startups. What makes a business a startup is its ability to develop without geographical constraints. Such business is created to grow and develop fast. Yet another thing we need to know about startups is the fact that they are not necessarily tech companies as it is commonly believed. Startups use the advantages of new technologies and this is probably their best and fastest way to achieve success and stop being a startup.

Startup founders believe that it is not the amount of time their businesses have been existing which indicates the status, it is the aspect of innovation and feeling of having an impact by what they are doing. Influencing the future world, fresh, new and appealing are the characteristics of startups, which make them attractive and so “cool”.

The fact that the acquisition of a startup by a big company means leaving “startup-dom” is also arguable for some founders. Surely, the process of acquisition and its conditions can be different in all cases, but the fact of going public or becoming a professional businessman in an expensive suit become very clear indicators that your startup may have stopped being a startup.

To sum it up, what makes your startup a real startup? Revenues below $20 million, less than 80 employees and you not freaking out about purchasing a new wardrobe of expensive suits and still having a total control over your fledging company.